23.
India has a vibrant private space <ul><ul><li>100 Indian Companies have market cap of US$ 1bn </li></ul></ul><ul><ul><li>1,000 Indian Companies have received foreign institutional investment </li></ul></ul>

28.
Public space is a problem <ul><li>We have </li></ul><ul><ul><li>Dynamic democracy with honest elections </li></ul></ul><ul><ul><li>Free, lively media and press </li></ul></ul><ul><ul><li>But we also have </li></ul></ul><ul><ul><li>Poor governance ! </li></ul></ul>

29.
Governance Failures <ul><li>Not the minister caught with a bribe </li></ul><ul><li>1 out of 4 school teachers absent in </li></ul><ul><li>government schools </li></ul><ul><li>2 out of 5 doctors absent in primary health </li></ul><ul><li>centers </li></ul><ul><li>Delhi’s water </li></ul><ul><li>Land titles </li></ul><ul><li>Etc </li></ul>

30.
Ironically, we used to have world class institutions from 1950-1980, but our problem was growth. Now we have growth, but our institutions are failing <ul><ul><li>Bureaucracy </li></ul></ul><ul><ul><li>Judiciary </li></ul></ul><ul><ul><li>Police </li></ul></ul>

34.
Understanding India’s economic success <ul><ul><li>Remarkable --every government has reformed (slowly) </li></ul></ul><ul><ul><li>since 1991 </li></ul></ul><ul><ul><li>Even slow reforms add up </li></ul></ul><ul><ul><li>65 countries have done the same reforms – why did India </li></ul></ul><ul><ul><li>become the second fastest in the world? </li></ul></ul><ul><ul><li>Unappreciated fact – rule of law </li></ul></ul>

35.
“ By 2010 India will have world’s largest number of English speakers” “When 300 million Indians speak a word in a certain way, that will be the way to speak it.” Professor David Crystal Cambridge Encyclopedia of the English Language

37.
Where are we today? <ul><li>Growth fell to 6.7% in 08-09; 7% in 09-10 </li></ul><ul><li>Pain has been less than in China </li></ul><ul><li>Competitive companies have recovered faster. </li></ul><ul><li>Risk of protectionism has receded </li></ul><ul><li>Recovery has been ahead of the world </li></ul>

38.
Where are we going? <ul><ul><li>Base case post recovery is 7.5 % – 8.5 % GDP growth </li></ul></ul><ul><ul><li>Democracy will not permit more than 8% unless you have a Thatcher </li></ul></ul><ul><ul><li>1.5% population growth </li></ul></ul><ul><ul><li>Demographic dividend – growth will continue beyond China’s </li></ul></ul>

40.
Convergence in the 21st century <ul><ul><li>Why convergence is intuitive? </li></ul></ul><ul><ul><li>Convergence didn’t happen in the 20th century because the world was closed </li></ul></ul><ul><ul><li>Returning to a world of equality prior to 1750 </li></ul></ul><ul><ul><li>When China and India accounted for 45% of world GDP </li></ul></ul>

41.
India will gradually turn middle-class 50% 50% 8% 22% 32% West of the Kanpur- Chennai line East of the Kanpur- Chennai line Chennai Kanpur- 1980 2000 2010 2020 2040

42.
What could stop the show? <ul><li>Infrastructure </li></ul><ul><li>- Improving via public-private parterships </li></ul><ul><li>Fiscal Deficit </li></ul><ul><li>Governance </li></ul><ul><li>None of these stopped the show in the past 25 years </li></ul><ul><li>- Nuclear War? </li></ul>

43.
Education System <ul><li>Is reasonably good for the top 20% </li></ul><ul><li>But it is abysmal for the rest </li></ul><ul><ul><li>1 in 4 teachers is absent in government primary schools </li></ul></ul><ul><ul><li>Hence, 54% of children in urban India are in </li></ul></ul><ul><ul><li>private schools </li></ul></ul><ul><ul><li>Solution: Education Vouchers </li></ul></ul>

46.
Elephant and not Tiger <ul><ul><li>India got democracy before capitalism and this has made all the difference </li></ul></ul><ul><ul><li>It is slower than China but its path is surer </li></ul></ul><ul><ul><li>However, an elephant at 8% growth is a formidable beast </li></ul></ul><ul><ul><li>We have waited 3000 years for this moment </li></ul></ul><ul><ul><li>India is more likely to preserve its way of life </li></ul></ul>